Extend "first right of refusal" to customers to own the company's stock, whenever there is a need for new/ additional external investment. Ofcourse, Customer owned stock could be managed within a predetermined range, as voluntarily decided by the board/ suggested by regulation.

Problem

Irrespective of how hard the management, especially the CEO tries to divide his attention between all important matters of the organisation, once in every 90 days he is reminded who 'he is answerable to', by the Board and investors in general. This disproportionate focus on top/ bottom line, EPS, etc., robs attention from other quarters, sometimes the ones that include customers, employees and/ or the society at large. And if one tries to keep all segments happy, he/ she may end up with a pretty average job at all.

Solution

When you need help as an individual, you look to friends and family, and then extend outward in circles. Organizations may as well follow what has worked with individuals since ages. Take in investment from close quarters first, before going to public offerings - customer, partner and employee groups. For all we know, these are the groups that know/ like us enough to invest in us and stay vested through our journey as an organisation. They will also be able to add tremendous value and provide critical feedback to the board, first hand. Their representation in the investor community (preferably, board of directors), fetching them the real power to contribute.

Investments by these groups will reflect how the company 'truly' stands in the eyes of its most important stake holders. Also, this will (partly) unify the customer, employee and investor groups, leading to better focus on the segment, and what is that sharp focus can't attain.

Ofcourse, there could be acceptable ranges for Customer, Partner & Employee stake (in extremity, this may cause some serious arm-twisting), with a "lowest level" to ensure Customers have real voice, even at the board level and a "highest level" to ensure the organisations' agenda is not hijacked.

Practical Impact

Customer involvement and empowerment, giving them a real voice.

Employees and Partners being able to provide critical feedback, at the right time directly to the board

Organisation would be able to measure the trust its customers, employees and partners place have in its operations, much beyond a satisfaction survey.

Holistic goals for the organisation would be encouraged with such a homogenous group at the helm

Better governance, ensured inherently, leading to possible loosening of the regulatory framework. More voluntary checks in place by organisations, welcomed by industry policemen

Could lead to better customer & employee retention rates

First Steps

1. Industry bodies to discuss this with regulatory agencies

2. Framework to be set up and brain stormed within companies

3. Customer, partner and employee groups to be approached for suggestions

4. Release the ICO (Customer offering)

5. Take in investments, and go...

At the risk of oversimplifying, ofcourse, this could take months, if not years to sort through. However, with the dynamic economic environment and with increased calls for transparency and fairness in management practices, the move could be welcomed by the average Joe and the Government alike. All this, with very little (control), to lose for the organisation and key gains for the customers.